Gunn on Challenges Facing Liz

It's been almost 10 months since Tim Gunn made his leap from academia to an executive role at one of fashion's largest public companies, and the reality TV...

It's been almost 10 months since Tim Gunn made his leap from academia to an executive role at one of fashion's largest public companies, and the reality TV personality is charged with one of the industry's biggest challenges: turning around the Liz Claiborne brand.

After spending the first half of his tenure filming "Project Runway" and "Tim Gunn's Guide to Style," Gunn has been using 85 percent of his time in the last four months to focus on the $4.99 billion vendor's troubled flagship brand. If he can regenerate it, he'll no doubt silence naysayers who might be turning a skeptical eye toward the Parsons dean-turned-reality TV star-turned-creative director of Liz Claiborne Inc.

Gunn seems humbly aware there are those who wonder whether his hire was an inspired move to utilize a persona that represents fashion to Middle America or a gamble to take someone from academia who has never designed a line, much less worked in a real-world fashion company, and put him in a top post in a multibillion-dollar public company. But he hopes his actions will answer any questions in the positive. "The longer I am here, the more advocates I have," Gunn said.

Gunn also has reassessed his opinions and has expressed increased admiration for those in the apparel world.

"When I was at Parsons, I used to proudly say that we were a real-world design school," Gunn said. "But academia is a very thick bubble that protects you from the real world. Here, there's real deadlines, factory constraints, the response of buyers. My respect for the real world has grown while I've realized how daunting the industry is."

After all, rescuing the better-priced Liz Claiborne brand is no small task. After years in which Gunn admits the brand's product stagnated, Macy's — its biggest wholesale partner — cut back orders last year, partly as a response to the creation of the diffusion Liz & Co. line with J.C. Penney. Retailers, some of whom have criticized the line for targeting too young a customer, having a weak price-value ratio and having margins in the low 30s, have cut back spring orders 30 percent, on top of 50 percent cuts last year, according to sources. The Liz Claiborne brand family, which includes Liz Claiborne, Liz & Co., Concepts by Claiborne, Claiborne, Axcess and Villager, is projected to bring in $1.5 billion this year — a slide in volume, led by losses in the Liz Claiborne brand itself, while exclusive brands like Liz & Co. are expected to expand.

One way to improve Claiborne's flagship brand is through personal appearances and fashion shows at major retail doors, which sources said greatly drive traffic and increase buys. This month, Gunn — who has developed a cult-like following — made appearances at Macy's Roosevelt Field store on Long Island and its Short Hills store in New Jersey. According to Macy's, although both events were in the middle of snowstorms, "We had terrific customer attendance....Over 200 people showed up to meet Tim and see a fashion show of the latest looks from Liz Claiborne." But it's not unusual for crowds of 500 or more people, from teenagers to parents, both men and women, to wait in line for several hours to meet Gunn, often asking to have their pictures taken with him.

Gunn has been traveling constantly on the weekends, visiting Dillard's and Macy's, stopping at Macy's in cities of "Project Runway" finalists' homes. Gunn, who is appearing in Macy's holiday ads on behalf of Martha Stewart, is hoping that spending time in key doors will help repair the fractured relationship with Macy's. After a less-than-successful "Liz Is" marketing campaign last year, much of the marketing dollars for the brand are being reallocated to grassroots partnering efforts, like Gunn's appearances.

"Richard Ostell has repositioned the Liz Claiborne brand as fashion, not just clothes, but our customer experience is not just with our showroom — it's with our pad in the stores," Gunn said. "We all know that for too many years the brand had stagnated and, because of that, became for retailers a replenishment brand. Now we have fashion back, but retailers still treat it as a replenishment resource and don't buy the fashion, so women aren't seeing the progress we've made. When customers see the fashion in the shows we do at events, they want to buy it, but they can only buy it if they're at the retailers, so retailers then want it to be there."

Though spring is already ordered, Gunn hopes the appearances will change the buying patterns for fall 2008.

"Special events are always great motivators for people to shop," said a spokeswoman from Macy's, who declined to comment on specific numbers or future orders. "By showing off looks in a fashion show, we teach customers new ways to wear an outfit. Our customers certainly respond positively to newness and react to new ways of wearing, pairing and accessorizing items from a collection."Although Gunn's in-store appearances are recognized as huge traffic-drivers, some question whether a dozen individual store appearances are enough to drive business on a macro level. The Liz Claiborne brand has monopolized the new executive's time because "it's Liz Claiborne where we need the help," Gunn said. "I won't trivialize how much work that involves."

While he spends some time with DKNY Jeans and Kate Spade, his focus is on neither of the other direct brands — Juicy Couture, Lucky Brand Jeans and Mexx — nor the nine remaining brands under review, including Ellen Tracy, Dana Buchman and Sigrid Olsen. Gunn puts his effort into brands that the company acknowledges have design issues; others, like Narciso Rodriguez and Juicy Couture, are completely autonomous.

But even for the more challenged brands, Gunn is not the designer, nor does he dictate the design process. He is rather "an advocate at the executive level for the designers," he said. "For example, one of their primary needs is a new computer system," he said. "Right now the company has a very cumbersome computer system." The new system is projected to be installed for August, though Gunn wants it done by January.

Claiborne chief executive officer William L. McComb, the former Johnson & Johnson group president who created the position for Gunn shortly after taking his own post, outlined his three priorities for Gunn:

- "Helping steer the senior management around decisions in design.

- "Directly working with the design community to develop a training program, from design school to continuing education.

- "In the turnaround in the Liz Claiborne brand, partner with [Dave McTague, executive vice president of partnered brands since September] on merchandising and consumer interface, plus enlist and deploy the support of retail in the early stages of our mission."

The initial plan had been for Gunn to focus his time not on the Liz Claiborne brand, but rather on creating the design curriculum and representing the designers on the executive level. But McComb said Gunn's "instant connection" with McTague, who was hired from Converse in August and started in September, when Gunn was finishing his filming, changed that. McComb asked Gunn to focus on the Liz Claiborne brand and delay the curriculum from fall to spring — after the brands under review will be sold, so it caters to the remaining design teams. The "system of enhanced learning for the design and merchandising community" will include a Web site with educational resources, video feeds of guest speakers and blogging — which would also reach teams in Los Angeles, Europe and Hong Kong.

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